You have K100,000 to invest in a portfolio containing stock Xenda, stock Yaku and a risk - free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 10.7 percent and that has only 80 percent of the risk of the overall market.

If X enda has an expected return of 17.2 percent and a beta of 1.8, Y aku has an expected return of 8.75 percent and a beta of 0 .5, and the risk - free rate is 7 percent, how much money will you invest in stock X enda ? How do you interpret your answer?